# Sharpe Ratio Raw returns can flatter to deceive—what matters is how efficiently those returns were earned. The **Sharpe Ratio** compresses this into one comparable number: *excess return per unit of volatility*. Choose the sampling timeframe (e.g., Daily or Weekly), log or linear returns, a realistic risk-free rate, and optional annualization. The result is a clean, time-consistent gauge of regime quality you can scan across assets and horizons. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.candelacharts.com/investing/risk-adjusted-performance/sharpe-ratio.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.